Every day, people make decisions. Some of them are trivial, like what to eat for breakfast or what type of clothes to wear, while others are more substantial, such as the direction of a business. Decisions of this magnitude require intense problem-solving and a careful cost-benefit analysis. To successfully make these kinds of decisions, executives apply informed decision-making to supplement intuitive aspects of uninformed decision-making.

The Investors Centre first step in making an informed decision is to accurately identify the decision that must be made. This might sound simple, but bad decisions are often made when the problem is not clearly defined. The next step is to gather as much information and data as possible. This can include talking to experts in the field, consulting outside sources and reading relevant research. However, it’s important to not overanalyze and end up in “analysis paralysis.”

Make Informed Decisions: Using Data to Guide Your Trades

In this phase of the process, it is important to remain objective. This means avoiding cognitive biases, such as confirmation bias and hindsight bias. It also means recognizing when you have too much or too little information, and identifying which elements are most important for the decision at hand.

Once you have a clear idea of the goal of the decision, it is important to weigh the alternatives. This can involve drawing up a list of pros and cons for each alternative or using a decision tree or flowchart to see how each solution will affect the situation. It’s also a good idea to consider downstream impacts, such as how the decision will impact other areas of the business or company culture.